Building a Self-Healing Agent with MCP and Observability

Most agents can generate code or do the work it is designed to do. What I'm starting to find more interesting is whether they can debug themselves. One of my friend's built a small demo around this idea using Monocle and OpenCode. Instead of asking the agent to build an application from scratch, I gave it a deliberately broken Text-to-SQL service and a failing test suite. The rule was simple: no reading local logs and no guessing fixes. The agent had to run the tests, inspect traces through MCP, identify the root cause from telemetry data, patch the code, and repeat until everything passed. What made this interesting wasn't the bugs themselves. The application only had a few issues: an invalid model configuration, incorrect response parsing, and a schema mismatch between prompts and the database. The interesting part was treating observability as part of the agent loop. Normally traces are something humans look at after a failure. Here the traces became the agent's source of truth. Every failure generated telemetry through Monocle, the agent queried those traces through MCP, and the next action was based on what actually happened rather than what the model guessed happened. It feels like an important shift for agent systems. A lot of agent workflows today stop at code generation. Production systems spend much more time debugging, monitoring, recovering from failures, and handling unexpected behavior. If agents are going to become useful engineering tools, they probably need access to the same observability layer engineers use. This demo was a small experiment in that direction, using Monocle for instrumentation and MCP as the interface between telemetry and the agent.